Now that we know what Arbitration is, let’s dig into the nitty gritty.

Arbitration can be binding or non-binding. Binding arbitration means that the parties of the dispute have to accept the decision of the arbitrator as far as what happens with the dispute – what the parties have to do and who pays whom any money, or any other details, and then the dispute is over. Non-binding arbitration is really just advice as to how the arbitrator thinks things should be resolved.

Binding arbitration is usually but not always the result of an Arbitration Agreement. This is a legal document that requires the parties to arbitrate certain claims between them rather than filing lawsuits and suing each other if there is a dispute. If you signed an arbitration agreement with someone or something you may be required to arbitrate problems rather than filing a lawsuit. Even if you don’t have to arbitrate you still can, but should you? Find out in our next installment.

You may have heard someone talk about “going to arbitration” or “having something arbitrated.” This might have been on the news, or something a friend said to you, or you may have read my forced arbitrationpost from last month. But to be honest, you didn’t know what that really meant. That’s pretty normal: most people go through their entire lives without ever arbitrating anything.

Arbitration can come up in many different contexts – much of the paperwork for bank accounts, credit cards, and even the user agreement for iTunes, contain arbitration agreements. If you don’t believe me, try digging through any long complicated paperwork you have looking for the work Arbitration. See?

Basically, arbitration is one way that parties in a dispute, whether they are individuals, companies or something else, can resolve that dispute (usually a legal dispute) without going to trial. An arbitrator is a third-party hired to help resolve the dispute between the parties involved. One or more arbitrators listens to the facts and reviews any evidence the parties have and then issues a decision. Pretty simple, right? There’s more to it: details on arbitration and the agreements that lead to it will be discussed next week.

Having your wages garnished can be troubling and stressful. It is horrifying when the debt for which the wages are being garnished isn’t even yours. You have very little time to claim an exemption with the sheriff’s office. You have to act quickly and immediately: file the necessary paperwork.

If your wages are being garnished for a debt that you do not owe, you need to get all the court records relating to the judgment that was entered against the debtor. This includes the filed complaint, proof of service of the complaint, and any documents that were filed after the complaint. Contact a top consumer attorney immediately, as claiming an exemption will not stop the garnishment permanently.

If you are not the debtor, or have already paid the debt, you will likely need to prove this. Proof can come in many different forms: proof that you lived somewhere else, cancelled checks, etc. More importantly, if this debt arises out of identity theft, then you must get copies of all your credit reports, file a police report, and place a fraud alert on your credit report.

Identity theft can affect a consumer for years. Filing the police report is just the first step. Once you have the police report, it may become evidence in the garnishment proceedings. You should have an advocate on your side on the day of the hearing. An attorney experienced in debt collection law on the consumer’s side is invaluable. Garnishment for a debt that is not owed by you also potentially opens up the Plaintiff to liability for violations of the Fair Debt Collection Practices Act. Don’t go it alone!

You get it: higher score good, lower score bad. So simple a caveman can understand it. Do the things to make your score go up, you’re fine, right? That’s a good start, but not the whole story. There’s no way to truly “improve credit score instantly.” And, as we said last time, before making drastic changes to how you manage your finances you should probably talk to a professional.

The fastest way to improve your credit score is to ritually follow these steps and reminders, in conjunction with talking to a professional. Each individual has a different situation and set of circumstances, and the plan of action might be heeded differently for each person:

Being late with payments can drop your score. This one is obvious, but it is important enough to bear repeating.

Using more of your available credit can lower your score. The less available unused credit you have the worse the effect on your credit score.

Closing existing or revolving accounts will usually leave you with less unused credit and this can hurt your FICO score.

When you seek new credit accounts, your credit will be checked, which can hurt your credit score. Remember this if you are seeking additional credit in order to have more unused credit available. (this is one example of why talking to a professional is important)

Debts owed because of a court judgment, tax lien, etc., carry an additional negative penalty, especially if they are recent.

Having one or more newly opened consumer finance credit accounts could hurt your score. If you don’t know what this is, you probably don’t have one.

Filing for bankruptcy. This one is pretty complicated, talk to a bankruptcy attorney for more information.

Knowing what a credit score is, how to read your credit score, and what comprises the score (as well as the consequences of bad credit scores), you are probably anxious to take steps to improve your credit. Here are a few actions and key points that can increase your score. You should know that there is no “magic bullet” for getting your credit to improve quickly. Before making drastic changes to how you manage your finances, you should probably talk to a professional.

Paying off debt and thereby lowering the credit utilization ratio can improve your FICO score. Alternatively, applying for and receiving credit limit increases or additional sources of credit also improves the utilization ratio. Be careful! Having more credit available may tempt you to use it, which would be worse for your score. Make sure you read our next article before running out and getting a bunch of shiny new credit cards!

As your credit history grows longer, your score can go up.

Increasing the number of types of credit in your credit history can improve your score. Categories include, but are not limited to, installment credit, revolving credit, consumer finance credit, and mortgage. Be careful, again! In order to increase the types of credit in your history, you will be taking on more debt. Watch this very carefully.

Now that you know how to improve your score, next time we’ll talk about how to avoid trashing our score.

Part of understanding your credit score is properly having your credit score explained. What is your credit score designed to accomplish and what sorts of things go into your credit history?

The free credit scores without membership fees or or other charges are used to inform banks and others who make loans of the likely amount of risk that a given person asking for a loan will be able to pay the loan back. This is done by looking at a person’s financial history.

The following information is what the banks, etc., look at – it is not an exact formula, but the rough numbers are according to FICO:

35%: Payment history including payments on bills, such as a mortgage, credit card or automobile loan.

30%: How much of the credit you have available are you using compared to how much you aren’t using (this is called credit utilization).

15%: The length of your credit history.

10%: The number of types of credit you have used.

10%: Recent searches for your credit score or credit report.

Looking over the list of things that affect your credit, the good news is that you have a lot of control over whether your credit score is good or bad. In the next few articles, we’ll talk specifically about what makes your credit score go up and what makes it go down.

Washington, DC – Buried in the fine print of millions of contracts are forced arbitration clauses, which deprive consumers of their statutory and constitutional right to a day in court, according to a study released today by the Consumer Financial Protection Bureau (CFPB). Forced arbitration clauses immunize large corporations from responsibility for their conduct and require consumers to give up their basic rights if they want to use financial products that we all rely on everyday like credit cards, bank accounts, car financing.

Allowing companies to force consumers into an often biased, secretive, and lawless system on an individual basis deprives millions of people of their right to go to court. Consumers must plead their cases to a private arbitrator who does not need to follow the law. The arbitrator’s decision is almost impossible to appeal, and any evidence of corporate wrongdoing conveniently remains secret. Forced arbitration clauses give corporate wrongdoers immunity from justice if they commit fraud, violate consumer protection laws, or fail to do what they promised.

The CFPB arbitration study shows that an ordinary consumer has absolutely no idea he or she is giving up constitutional, statutory, and common law rights and surrendering his or her day in court. The study demonstrates that forced arbitration clauses, and specifically those that prohibit class actions, are becoming standard business practice in contracts for financial products like payday loans, credit cards, prepaid cards and checking accounts. The study confirms that the main impact of forced arbitration is to stop injured consumers from getting any relief at all.
Companies now use forced arbitration clauses and class action bans to eliminate the ability of consumers to band together, which in many circumstances is the only means to vindicate their rights. State attorneys general and federal government officials have confirmed that class actions provide real and meaningful benefit to harmed consumers and can result in reforming bad business practices that are in the public interest and complement public enforcement work.

However, the mere existence of a forced arbitration clause with a class-action ban in a contract permits businesses to continue to engage in unfair and deceptive practices and ignore consumer protection laws without any accountability to consumers.

We urge the CFPB to act quickly to ban forced arbitration clauses in contracts for financial products and services.

Background Information
What is forced arbitration? Forced arbitration clauses are buried in the fine print of employment, cell phone, credit card, retirement account, home building, and nursing home contracts. Just by taking a job or buying a product or service, individuals are forced to give up their right to go to court if they are harmed by a company. Because the private system of forced arbitration benefits companies — and disadvantages consumers and employees — more and more industries are using forced arbitration to evade accountability. In arbitration, there is no publicly accountable judge, jury, or right to an appeal. The arbitrators do not have to follow the facts or the law, and there is no public review of decisions to ensure the arbitrator got it right. Moreover, contracts typically name the arbitration firm that must be used—the one preferred by the company. Arbitrators have an incentive to favor the company, which can give them repeat business or not.

If the phone rings and the caller says he represents the IRS, be suspicious.

That’s the warning from federal authorities, who on Thursday said a nationwide phone scam has stolen $1 million from thousands of unsuspecting people.

The impostor claims to be an Internal Revenue Service representative and tells “intended victims they owe taxes and must pay using a pre-paid debit card or wire transfer,” an IRS inspector general office said.

“The scammers threaten those who refuse to pay with arrest, deportation or loss of a business or driver’s license.”

The IRS has received more than 20,000 reports about the scam.

J. Russell George, the Treasury inspector general for tax administration, called it “the largest scam of its kind that we have ever seen.”

According to the inspector general, IRS officials typically first reach out by mail rather than phone, and don’t demand immediate payment by debit card, credit card or wire transfer.

The IRS said people who receive such calls or other suspicious requests should contact the IRS.

Tax-related phone scams are among the “dirty dozen” fraud techniques the IRS warned about earlier this tax season. It also warned of phishing emails, preparer fraud and claims a preparer can offer “free money.” To top of page

The California General Assembly Monday unanimously passed a bill that requires debt buyers in the state to have in their possession a long list of account information before debt collection efforts can begin. The new law also mandates specific disclosure language debt buyers must use in collection communications.

Titled the Fair Debt Buying Practices Act, California SB 233 passed the Assembly Monday on a 72-0 vote. In late May, the bill passed the state’s Senate on a 36-0 unanimous vote. The measure now goes to California Governor Jerry Brown for his signature. Its provisions would take place on January 1, 2014.

Most significantly, the bill places a long list of requirements on purchasers of charged-off consumer debt that must be met before collection efforts can begin. Debt buyers must have in their possession proof that they are the sole owner of the debt, the account balance at chargeoff, date of default or last payment, name and address of both the creditor and debtor, and a complete chain of title on the account if bought and sold multiple times.

There is also a long list of requirements for initial communications with a debtor. In addition to explicitly stating that the consumer has the right to request the information outlined above, debt buyers must disclose certain rights to consumers regarding time-barred debt.

If a debt is too old to file suit, but still within credit reporting thresholds, the debt buyer must use the following language in its first written communication:

“The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, [insert name of debt buyer] may [continue to] report it to the credit reporting agencies as unpaid for as long as the law permits this reporting.”

If the debt is beyond both the reporting and legal statute of limitations, the following must be included in the letter:

“The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it, and we will not report it to any credit reporting agency.”

The Fair Debt Buying Practices Act also sets formal requirements for the information presented as evidence in a debt collection lawsuit and bars a debt buyer from selling an account that has been settled for less than the full amount owed.

CONSEQUENCE:Failure of the tie rods may result in a loss of vehicle control and increase the risk of a crash.

REMEDY:
Maserati will notify owners and dealers will replace the tie rod assemblies. The recall is expected to begin by the end of June 2013. Customers may contact Maserati at 1-877-696-2737. Maserati’s recall campaign number is 205.

NOTES:
Owners may also contact the National Highway Traffic Safety Administration Vehicle Safety Hotline at 1-888-327-4236 (TTY 1-800-424-9153), or go to www.safercar.gov.